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Welcome to our fifth issue of Currents – our energy industry insights e-newsletter – for 2026.
In an effort to keep you apprised of energy news, we have something of our own to share. The Supreme Court of Appeals of West Virginia (SCAWV) recently awarded a total, multi-million-dollar victory to natural gas producer Equinor USA Onshore Properties, LLC. Equinor sells its unprocessed natural gas to a midstream company that, in turn, processes and sells the gas to third parties. This sparked a dispute as to the proper calculation of Equinor’s severance taxes—the state’s Tax Division sought to tax the higher proceeds that the midstream company received, while Equinor argued that its tax should be based on only its own, lower receipts from the sale of unprocessed natural gas. The Supreme Court of West Virginia ruled in favor of Equinor on all aspects of this appeal, including that: (a) severance tax is based only on the money a producer actually receives from its sale and not any proceeds from a downstream sale; (b) the fees of the midstream company are not automatically attributable to the producer for tax purposes, but depends instead on the when and where those fees are incurred; and (c) appeals may be filed within 60 days of a refund check or other "informal" written notice of a Tax Division decision—written notice need not be in a specific form or "formal" letter to spark the appeal window.
This decision will significantly impact producers across West Virginia, shaping how the oil and gas industry addresses multiple issues, including contracting with midstream companies and producers, structuring invoices and settlement statements, calculating severance taxes, and filing appeals of Tax Division determinations.
As the team that led this litigation from start to completion, Spilman is prepared to advise others in the oil and gas industry on how they, too, may benefit. Please let our team know if you have any questions or need counsel regarding this issue.
Upcoming Events
Energy and Mineral Law Foundation’s 47th Annual Institute, Charleston, SC, June 14-16
Join our attorneys at this vibrant legal community’s annual meeting, focused on a commitment to the thoughtful study and examination of energy and natural resources legal topics. Spilman’s Mark Heath and Jason Wandling will be attending and presenting. Click here to learn more.
Spilman’s SuperVision Labor & Employment Symposium, Charleston, WV, June 18
2026 Workplace Masterclass: L&E Compliance, AI, & the Brave New Employment Landscape: A fast-moving, high-impact seminar for employers navigating the modern workplace. Join Spilman attorneys for our full-day SuperVision Symposium, designed to inspire confidence in navigating complex employment decisions. This complimentary symposium is tailored for business owners, C-suite executives, HR professionals, and anyone who manages employees. Dive into a day of valuable insights on employment topics such as AI, investigations, litigation, immigration, labor law, accommodations, and much more. Please click here to learn more and register.
Again, thank you for reading!
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Barry A. Naum
Chief Content Editor, Currents
Member, Co-Chair of Utility Law Group
| | One Big Reason Why Consumer Power Costs Keep Going Up | | |
By Derrick Price Williamson
In an objective vacuum, the notion of improving and expanding our electric grid and building new power plants sounds great – it is essentially accepted that we need more electric power to meet growing demand, driven by data center growth. The inherent problem with that, however, is that someone must pay for that investment, and more often than not, that means power consumers are paying for new transmission lines and generation power plants while they are being built, and thus before they can provide any benefit to those same consumers.
Click here to read the entire article.
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“Governments will prioritize energy security, aiming to diversify their supplies, leading oil executives said. Investments in oil exploration and production will increase, they said.”
Why this is important: The Iran war is likely to result in big changes in how nations view and develop energy supplies and their sources for energy. The shutdown of the Strait of Hormuz to date has taken 1 billion barrels of oil off the market, and the amount of oil removed from the world’s energy supply grows daily. Many countries are looking to diversify energy sources and oil supplies. This means more oil is likely to be drilled in Africa and in offshore and deep-water oil fields around the world. --- Mark E. Heath
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“The U.S. Energy Information Administration revised its earlier forecasts to reflect a much bigger and lengthier hit to global oil supplies from the Iran war than it previously projected, highlighting the uncertainty that has roiled broader energy markets since the conflict began three months ago.”
Why this is important: The Iran war continues to have a tremendous impact on both the inventory of oil and the world‘s energy supplies. The U.S. Energy Information Administration has increased its estimate of the amount of oil shut in and not available to be used to 10.8 million barrels through the month of May. In addition, global oil inventories will drop 2.6 million barrels per day due to oil being pumped from reserves to meet oil demands as Middle East oil is off the market. That number will likely grow in the coming months. --- Mark E. Heath
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“The European Union’s dependence on liquefied natural gas from the United States is set to rise significantly, reaching 80% of all LNG imports in two years, the Institute for Energy Economics and Financial Analysis has warned.”
Why this is important: A recent report from the Institute for Energy Economics and Financial Analysis (IEEFA) warns that the European Union’s reliance on U.S. liquefied natural gas (LNG) is poised to increase substantially, potentially reaching 80 percent of total EU LNG imports within two years. U.S. LNG already represents approximately 58 percent of the EU’s LNG imports, raising concerns about overreliance on a single supplier. This is an issue the EU has previously sought to avoid in the context of Russian energy dependence following the invasion of Ukraine.
The report highlights a tension between the EU’s geopolitical objectives and its current energy procurement strategy. Although the EU plans to phase out Russian energy imports by 2027, it continues purchasing Russian LNG in the interim while simultaneously expanding imports from the United States. IEEFA argues this shift merely replaces one dominant external supplier with another and recommends accelerating deployment of renewable energy sources and electrification technologies such as wind, solar, and heat pumps.
The issue is further complicated by a 2025 U.S./EU trade arrangement under which the EU committed to purchase $750 billion in American energy commodities over three years. Critics within the European Parliament have questioned the feasibility and economic implications of fulfilling those commitments. --- Jason Wandling
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“US LNG shipments to China dropped sharply since 2025.”
Why this is important: Reuters reports that China may receive its first direct shipment of U.S. liquefied natural gas (LNG) in more than a year, potentially signaling a modest easing of U.S./China energy tensions in the wake of the summit between President Trump and President Xi Jinping. Three LNG tankers departed Louisiana export facilities in May and are expected to arrive in China in June.
Although Chinese firms maintain long-term contracts with U.S. LNG producers, many cargoes have been redirected to third-country buyers due to trade disputes and favorable resale economics amid elevated global LNG prices. Analysts note that China has increasingly relied on pipeline gas imports from Russia and Central Asia while viewing the United States as a comparatively unreliable trade partner.
The prospective shipments would represent the first direct U.S.-to-China LNG deliveries since February 2025 and represent a substantial decline from 131 in 2021, 64 in 2024, and a handful in 2025-2026. --- Jason Wandling
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“As the Middle East energy crisis deepens and disruptions tied to the Iran conflict continue tightening global oil and gas flows, coal demand is rising again across major economies.”
Why this is important: The current demand for reliable and available energy sources has brought coal back into the forefront of the energy conversation. Despite climate targets, investor pressure, and policy commitments towards a more renewable future, increased energy demand combined with energy uncertainty in the Middle East has brought back coal's value.
Coal demand trends still vary significantly by region. While global coal demand is expected to reach a record 8.85 billion metric tons according to the International Energy Agency, that demand is largely concentrated in China and India. In the U.S., coal consumption has declined over the past two decades, but that decline may be slowing due to higher natural gas prices and slower-than-expected coal plant retirements. Since coal continues to provide reliable, dispatchable power at scale, it is proving to be a resilient resource amidst rising energy demand and uncertainty. --- Steven W. Lee
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“The United States produced nearly three times as much solar, wind and geothermal power in 2025 – around 20% of the nation’s power – as we did in 2016, with growth in 49 states.”
Why this is important: The Environment America Research & Policy Center and Frontier Group have recently released new data showing increased production of solar, wind, and geothermal power in the U.S. over the past decade. Those three energy sources accounted for 21.4 percent of national retail electricity sales in 2025, which is up from eight percent in 2016. There has also been a significant increase in utility-scale battery storage and production of electric vehicles over that same period. While these increases are significant, the article does not discuss whether this growth trajectory is expected to continue at the same pace as the last decade or, alternatively, plateau as other energy sources continue to be used. --- Steven W. Lee
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“Hydropower remains the world’s third-largest electricity source but is often overlooked despite its vast untapped potential.”
Why this is important: Hydropower is the third largest source of electrical generation in the world and is often overlooked. With rising fuel costs from the Iran war, many governments are looking at adding hydropower for energy diversification. Hydropower began being used in the 1800s, and now approximately 4500 terawatts of power are being generated. Hydropower generates 14 percent of the world's electrical generation. China is the largest hydropower producer with 29 percent of the world’s hydro generation, followed by Brazil, the United States, and Canada. Experts estimate that 60 percent of the world's hydropower resources have not been tapped. --- Mark E. Heath
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“Wind energy is expected to provide about 11% of U.S. electricity generation in 2026 and utility-scale solar is projected to provide about 8% of generation.”
Why this is important: The U.S. Energy Information Administration believes renewable energy will grow in 2026. Wind energy will provide about 11 percent of U.S. electricity and utility-scale solar is projected to provide about eight percent of generation. Smaller-scale solar, like rooftop solar on homes, likely adds another two percent to the totals. That means 21 percent of America’s power is projected to be provided from wind and solar energy sources. --- Mark E. Heath
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“Red and blue states alike are working to transform abandoned wells from costly, polluting liabilities into sources of clean power and heat.”
Why this is important: Geothermal energy is the natural, renewable heat generated and stored within the Earth. Magma heats and melts rocks, creating reservoirs of water beneath the surface. By drilling deep into the Earth’s crust via original or existing drill holes, the extremely hot water trapped in reservoirs can be pumped out as steam and water and used to power turbines, which produce electricity that is then transferred to the grid.
The article examines why geothermal is not being employed more extensively. It notes several factors, including the lack of technology, funding, a clear revenue stream, and administrative hurdles such as obtaining land permits. In spite of the environmental benefits, economic value remains somewhat missing as the technology has not yet reached the level necessary to scale the endeavor. While not insurmountable, the goal will not be achieved unless a new concerted effort emerges to fund research, exploration, and testing. --- Sophia L. Hines
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“Since the 1990s, however, the United States has lost much of its critical mineral processing capacity.”
Why this is important: The article addresses the fact that as production of rare earth elements grew abroad, U.S. production fell sharply to near zero by the early 2000s. The U.S. and allied countries have shipped as much as 90 percent of extracted rare minerals to China for processing. As of 2024, the U.S. alone has imported about 80 percent of its rare earth compounds and metals. In response, the U.S. government is pushing to increase domestic production and processing of critical minerals.
The task, however, is not simple. The facilities needed require years of permitting, highly specialized equipment, and a workforce trained to operate the facilities. To that end, industry projections estimate that the mining workforce will need to grow significantly in the coming years to meet rising demand. This increased need comes at a time when the number of mining and mineral engineering education programs is producing only a few hundred graduates per year.
While there would be an economic benefit to these facilities, increasing U.S. production of rare minerals will arguably have a massive impact on the environment. Processing these minerals involves chemical processing of acids and solvents, which can produce toxic wastewater, air pollution, and contribute to soil erosion.
Ultimately, increasing production of rare materials will likely require sustained investment alongside broader mineral policy changes, such as permitting reforms and investment in domestic processing facilities. --- Taiesha K. Morgan
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“To meet booming AI-driven energy demand, utilities and regulators must adopt better rules, better forecasts, and better commitments.”
Why this is important: Data centers are not the first industrial customers to require greater power outputs than the average household; however, the speculative nature of the technology, the legislative delay in passing national regulations, and the reality that most utility sources must invest in additional transformers, substations, and transmission upgrades without complete guarantees are creating real concerns as addressed in this article. Forecasting for a data center's power usage can be exaggerated when only one party, the utility company (through its captive customer base), is footing the bill associated with the expansion effort. Large-load tariffs may help to compensate and incentivize utility providers and cover the broad range of contingencies, but the flexibility of service may become a factor as homes or businesses naturally cycle through peaks in energy usage. Regardless, the power grid is a rigid asset that must be managed with competence and care. The burden that data centers create throughout the U.S. can be mitigated to some degree, but the enthusiasm of a few investors and corporations must be carefully balanced with the necessity of planning, mutual investment, cooperative strategy, and long-term fee-bearing contracts. --- Sophia L. Hines
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“Developing its space-based orbital data centers is one of the major drivers behind SpaceX's IPO plans, as the endeavor is expected to be highly capital intensive and technologically challenging.”
Why this is important: Alphabet Inc.’s Google recently announced Project Suncatcher. The article explains that this project is a research effort to network solar-powered satellites equipped with Google’s Tensor Processing Units into an orbital AI cloud. The prototype launch is set for 2027 and will be a partnership between Google and Elon Musk’s SpaceX. Google is also collaborating with Planet Labs, launching two prototype satellites by around 2027. This development will be highly capital-intensive and technologically challenging, which will be a major driver behind SpaceX’s IPO plans. --- Taiesha K. Morgan
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Here is a round-up of the latest statistics concerning the energy industry.
ELECTRICITY
PETROLEUM
NATURAL GAS
COAL
RENEWABLES
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